This week, I've looked at various components of the US labor market statistical set to get an idea for the overall composition of the employment situation. The indicators were broken down along the lines established by Macroblog in their spider chart, and involve four data sets: leading indicators, confidence, utilization and employer behavior. Let's put all of the information together to get a complete picture.
1.) The leading indicators (jobless claims, temp employment) are positive. Initial claims are in the 330,000-360,00 range and are clearly in a downtrend. Temporary help hiring is at very high levels.
2.) Employer behavior still shows a great deal of caution. While there has been a consistent trend of hiring over the last four years, there is still a 2 million job gap between the highest employment level of the last expansion and the current level of establishment jobs. Employer trepidation is best shown in the weak hires/job openings number, which shows that employers are being very cautious about who they hire.
3.) There isn't much confidence right now. Quits are low, which indicates people are concerned about their ability to get a new job. In addition, employer confidence is still at an overall low level.
4.) Overall labor market utilization is still at pathetically high levels, indicating we're just not using our available labor resources efficiently.
There are a lot of reasons for the slow pace of hiring. First, overall domestic growth is "moderate" (to use the most often used adjective in the Beige Book), telling us there isn't a big crush for new hires. Overseas markets are still weak, lowering export demand. Productivity growth is fair, which is probably all that is required in a slow growth environment to keep employers from hiring.
However, I am still amazed at the remarkable lack effort on the part of Washington to actually do anything at this point. That is perhaps the greatest crime of all.